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European Stocks Rise as Earnings Top Weakness in Oil, French Banks

European shares rose on Tuesday, pushing the benchmark STOXX 600 back into positive territory for the year, with some encouraging company updates and gains in mining stocks helping to counter weakness in oil majors and euro zone banks.

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Chipmaker AMS rose nearly 17 percent after results and was poised for its biggest-ever one-day gain, while food-processing machinery maker GEA was up 6 percent after setting a brighter profit outlook.

"The earnings season is clearly supporting the European stock market. We have seen some sound earnings increases in the fourth quarter and the trend could continue at least in the first quarter of 2017. A weaker euro is also supporting export-oriented companies," Unicredit analyst Christian Stocker said.

DCC rose 6.4 percent after the company, engaged in activities ranging from oil and food distribution to waste management, said it would buy the retail petrol station network of ExxonMobil's Norwegian unit, Esso Norge AS, for 2.43 billion Norwegian crowns ($293.38 million).

However, gains were muted following declines in shares of some major companies after their updates disappointed investors.

Oil major BP dropped nearly 3 percent, the biggest faller in Britain's blue-chip FTSE 100 index, after the company missed estimates. Peer Statoil also fell 1.5 percent after a disappointing set of results.

French banks, among the best performers across European financials in 2016, fell after BNP Paribas reported results below forecasts.

BNP Paribas' fourth-quarter net income rose to 1.44 billion euros ($1.5 billion), more than double from a year ago, although the result came in below the average of analyst estimates of 1.50 billion euros in a poll.

France's benchmark CAC share index underperformed the broader European stock market and was trading flat following concerns around an upcoming presidential election in France.

"The political uncertainty is a burden for financials in France. Some election noise advocating for an exit from the European Union is making investors jittery," Stocker said. "Financials did very well in the last 2-3 months and probably we are seeing some profit taking now."

Far-right National Front Leader Marine Le Pen has vowed to fight globalisation and take France out of the euro zone, while conservative candidate Francois Fillon on Monday vowed to fight on for the presidency despite a damaging scandal involving taxpayer-funded payments to his wife.

Elsewhere, Finnish oil refiner Neste fell more than 6 percent after its fourth-quarter operating profit came in slightly below consensus forecasts. Analysts said that a lack of clarity in its renewables outlook was putting pressure on its shares.